Deutsche Annington to Buy Gagfah

Deal Creates Europe’s Second-Largest Listed Real-Estate Group

FRANKFURT—Real-estate company Deutsche Annington Immobilien SE on Monday offered to buy rival Gagfah SA for €3.88 billion ($4.83 billion) in cash and shares in a move to build its position in vibrant markets like Berlin, Dresden and Hamburg.

The deal would create a company with roughly €21 billion worth of assets and 350,000 residential units, making it the largest landlord in Germany. The offer values Gagfah at €18 a share with...